In the Budget 2023, one of the important proposals is a reduced rate of tax and an increased threshold limit under the  New Tax Regime. Checkpoints that need to be kept in mind before switching over from the old regime to the new regime


Filing ITR by 31st July

Those who want to switch from the old regime to the new regime for the financial year 2022-23, should be required to file their Income Tax Return by 31st July 2023. From the financial year 2023-24 a new tax regime will become the default regime. That means while filing the Return of Income for the financial year 2023-24 under the old regime, one has to select that option.


Compare the taxability before switch

Comparing the taxability under the old regime with the new regime is advisable before switching. Those who have business income can’t always make the switch. Only the taxpayers having no business income can switch between the tax regimes each year.


tax regime


Additional compliance for those having business income

Those having business income and wanting to switch to the new regime are required to file a declaration in Form 10IE before filing the Return of Income.


Read More: New income tax regime: Should you opt for it over forced savings?


Multiple investments

Taxpayers who have multiple investments and covering all the threshold limits of deductions for e.g. Rs.1,50,000/- u/s 80C, Rs.50,000/- u/s 80CCD(1B), Rs.50,000/- u/s 80D and having a home loan or education loan too then for those taxpayers, it is always advisable to go for the old regime than for new regime.